Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
THEY DON'T RING THE BELL AT THE CRPTO MARKET TOP! - 20th Dec 24
CEREBUS IPO NVIDIA KILLER? - 18th Dec 24
Nvidia Stock 5X to 30X - 18th Dec 24
LRCX Stock Split - 18th Dec 24
Stock Market Expected Trend Forecast - 18th Dec 24
Silver’s Evolving Market: Bright Prospects and Lingering Challenges - 18th Dec 24
Extreme Levels of Work-for-Gold Ratio - 18th Dec 24
Tesla $460, Bitcoin $107k, S&P 6080 - The Pump Continues! - 16th Dec 24
Stock Market Risk to the Upside! S&P 7000 Forecast 2025 - 15th Dec 24
Stock Market 2025 Mid Decade Year - 15th Dec 24
Sheffield Christmas Market 2024 Is a Building Site - 15th Dec 24
Got Copper or Gold Miners? Watch Out - 15th Dec 24
Republican vs Democrat Presidents and the Stock Market - 13th Dec 24
Stock Market Up 8 Out of First 9 months - 13th Dec 24
What Does a Strong Sept Mean for the Stock Market? - 13th Dec 24
Is Trump the Most Pro-Stock Market President Ever? - 13th Dec 24
Interest Rates, Unemployment and the SPX - 13th Dec 24
Fed Balance Sheet Continues To Decline - 13th Dec 24
Trump Stocks and Crypto Mania 2025 Incoming as Bitcoin Breaks Above $100k - 8th Dec 24
Gold Price Multiple Confirmations - Are You Ready? - 8th Dec 24
Gold Price Monster Upleg Lives - 8th Dec 24
Stock & Crypto Markets Going into December 2024 - 2nd Dec 24
US Presidential Election Year Stock Market Seasonal Trend - 29th Nov 24
Who controls the past controls the future: who controls the present controls the past - 29th Nov 24
Gold After Trump Wins - 29th Nov 24
The AI Stocks, Housing, Inflation and Bitcoin Crypto Mega-trends - 27th Nov 24
Gold Price Ahead of the Thanksgiving Weekend - 27th Nov 24
Bitcoin Gravy Train Trend Forecast to June 2025 - 24th Nov 24
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Gains, ECB "Could Print Euros" to Fund Own Bailout

Commodities / Gold and Silver 2011 Oct 12, 2011 - 09:26 AM GMT

By: Ben_Traynor

Commodities

Best Financial Markets Analysis ArticleSPOT MARKET gold bullion prices climbed to $1687 an ounce Wednesday morning London time – their highest level since September 23 – as stocks and commodities also gained despite Slovakia's parliament voting against measures designed to promote Eurozone stability.

"Only a close back above $1684 will [see] the market shift neutral," write technical analysts at gold bullion dealing bank Scotia Mocatta.


However, they add, "a break of $1634 will bring in sellers...there is a rising trend line [at that level] drawn off the $1538 low".

Gold bullion "has stepped into new territory," says a note from UBS, adding it is "acting like a hybrid of a risk asset and a safe haven."

Silver bullion hit a three-week high at $33.05 per ounce.

Slovakia's parliament yesterday voted against ratifying the Eurozone leaders' agreement of July 21 that seeks to grant additional powers – including recapitalizing banks and buying sovereign debt on the open market – to the European Financial Stability Facility.

The vote led to the fall of Slovakia's government after junior coalition partner the Freedom and Solidarity party refused to back the motion. Prime minister Iveta Radicova says she will try to hold a second vote this week and seek opposition backing.

The other 16 Eurozone members have already ratified the agreement.

"Eventually a yes vote will be secured," reckons Tim Ash, head of emerging-market research at Royal Bank of Scotland.

"Does Slovakia really want to be alone among 17 Eurozone members states on this one, and when the future of Europe is at stake?"

Elsewhere in Europe, billionaire investor George Soros and 95 others – most of them politicians and finance industry professionals – have written to the Financial Times today warning that failure to fix the Euro's faults could "destroy the global financial system".

They call for a common Eurozone treasury to raise funds for all members – an idea reminiscent of the joint-government 'Eurobonds' that Germany's Chancellor Merkel has described as a "last resort" and "not a sensible idea".

Soros and his co-authors also call for reinforced supervision and regulation, as well as a strategy for economic convergence and growth.

"When voters read this I feel this will have the opposite effect than [the writers] intended," said one comment on the FT's Alphaville blog.

The European Banking Authority – the continent's top banking regulator – has agreed in principle that banks should ensure their core Tier-1 capital ratios would remain above 9% in the event of sovereign debt writedowns.

Should this higher Tier-1 ratio be enforced, it will be higher than that expected by many analysts, and may require Europe's banking sector to raise an additional €275 billion, according to Morgan Stanley.

The EBA's July stress tests required a bank's Tier-1 ratios following an adverse shock to remain above 5% to pass – although those tests did not model for a sovereign default.

The impact of sovereign defaults on the European Central Bank, meantime, is "too frightening to contemplate" says Professor David Beim of Columbia Business School.

"Who would bail out the ECB?" he asks, pointing out that a "disproportionate fraction" of the ECB's €1 trillion of assets is likely to be made up of distressed government bonds.

"The endgame is likely to be the printing of Euros and a burst of inflation."

Here in the UK, the unemployment rate rose to 8.1% in the three months to the end of August – its highest level since October 1996 – according to official figures published today.

The overall number of unemployed hit 2.57 million, the highest since October 1994.

Over in the US, the Senate yesterday approved the Currency Exchange Rate Oversight Reform Act, which would allow the US to impose import duties in cases where it believed the exporter's currency was 'misaligned'. The bill still has to be approved by the House of Representatives and the president.

China's foreign ministry criticized the development, saying it could lead to a "trade war".

Central banks meantime could make net purchases of 500 tonnes of gold bullion this year, according to leading precious metals consultant Thomson Reuters GFMS, which increased its 2011 forecast from 336 tonnes on Wednesday.

By Ben Traynor
BullionVault.com

Gold price chart, no delay   |   Buy gold online at live prices

Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK's longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics.

(c) BullionVault 2011

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in